The message is to encourage investors to think carefully
about their risk tolerance, their true investment horizon, the extent to which they experience distress if an overvalued market advances without them, the extent to which they believe that historical evidence should inform investment decisions, and the extent to which they would be able to adhere to their investment discipline in the face of what could very well be a 50 % market loss over the completion of this cycle.
«It's not just
about your risk tolerance,» he adds.
That says a lot
about your risk tolerance... and handiness around the house.
CNBC.com recently talked with Craig Cowles, a certified financial planner and partner at Cardinal Wealth Advisers,
about risk tolerance and the variables that affect it.
It enables policymakers to think carefully
about risk tolerance — the certainty required before intervening and the potential consequences of premature or delayed interventions.»
Now of course all the other factors come in to play
about risk tolerance and feelings about debt...
There are questions
about risk tolerance too, including just how much volatility you're willing to stomach.
I also have an entire post
about risk tolerance, which also may give you some insight into my thinking about risk.
As you stated it's all
about risk tolerance and that's what personal finance is really all about.
It tells
us about Risk Tolerance in the Real World.
The best strategy is prevention: before signing on with a new advisor, be clear
about your risk tolerance, ask what losses are possible with the recommended investments, and carefully read over the KYC documents before you sign them.
Then, after everything is signed, the advisor goes back and fills in the sections
about risk tolerance.
Not sure
about your risk tolerance?
Think
about your risk tolerance and the specific risks about which you're concerned.
You can find out more
about your risk tolerance by completing free online questionnaires available on numerous websites maintained by investment publications, mutual fund companies, and other financial professionals.
How many times have you read
about risk tolerance?
This asset allocation calculator from CNN Money asks a few questions
about your risk tolerance and how soon you'll need your money, and it creates a pie chart suggesting how much you'll need in each type.
First, you have to learn
about your risk tolerance to make sure you're ready to invest at all, come up with a rough plan, figure out whether to prioritize your TFSA or RRSP, etc..
The choices are as much
about risk tolerance and diversification, and would be just as important to consider as everything in the U.S. fixed income space.
«Going for float» is all
about risk tolerance and how tightly wound your monthly budget is.
A good financial planner will talk to you about your plans and expectations both short and long term, and
about your risk tolerance (would a drop in value panic you even if you know it's likely to recover and average out in the long run, that sort of thing), and about how much time and effort you want to put into actively managing your portfolio.
When you sign up for an account, you'll be asked questions
about your risk tolerance, and your Wealthfront portfolio will be based on that.
(To learn more
about risk tolerance, read Personalizing Risk Tolerance and Determining Risk And The Risk Pyramid.)
Some of it is
about risk tolerance.
Not exact matches
But it's also
about tolerance for
risk.
«For people who have the
risk tolerance, investing that money rather than paying off the mortgage is fine, but think
about what would happen if the investments don't pan out and you still have to pay your mortgage,» says Craig Brimhall, vice president of Wealth Strategies at Ameriprise Financial.
Based on an initial questionnaire
about your investment needs, financial background, and
risk tolerance, they allocate your money among asset classes (e.g. stocks, bonds, real estate), then use algorithms to monitor and periodically rebalance your portfolio.
Retirement savers who are worried
about the ups and downs in the stock market should revisit their
risk tolerance.
«The choices you make
about your mix of stocks, bonds, and cash should be based on your personal situation, goals,
risk tolerance, and timeline, and you should maintain that asset mix through the ups and downs of the market,» explains Ann Dowd, CFP ®, a vice president at Fidelity.
The great thing
about Wealthfront's investment portfolios is that you can can manually change your
risk tolerance number to see how the model portfolio changes.
You can't begin to think
about individual asset allocation models until you figure out which asset classes are appropriate for you based on your age, time frame, financial resources, experience, personality, desires, objectives, goals, and
risk tolerance.
During our discussion Monica asked me a number of questions (in addition to the questionnaire that assess your
risk profile that Vanguard emails you before your call with a Vanguard Personal Advisor) not just
about my finances and
tolerance for
risk, but
about my life — what did I love to do, how often did I travel, what kind of lifestyle do I want to live in 5 and 10 years, and then finally the most important question — when would you like to retire?
The advisor will ask you basic questions
about your net worth, budget, goals,
risk tolerance, current investing strategy, investing experience, and any other pertinent information.
With Betterment, new investors fill out a short questionnaire
about investment goals and
risk tolerance.
To learn
about how to determine what kind of asset mix is appropriate for your
risk tolerance, see Achieving Optimal Asset Allocation.)
Our asset allocation is
about 48 % domestic stocks; 15 % international stocks; 20 % bonds; 12 % real estate and 5 % cash, and in general our
risk tolerance is high with combined annual income of
about $ 350k / yr.
In doing so, we are balancing the improvement in our quantitative measures, as well as our qualitative analysis, against our
tolerance for
risk (we prefer investment positions that allow us to be dead wrong
about everything and still not experience intolerable losses).
Your
tolerance for
risk is likely higher and you don't have to worry
about big changes in stock values from one year to the next.
The mix is obviously down to your own
risk tolerance but I'll keep
about 5 years of living in cash.
If you're not sure of your
risk tolerance, use our Asset Allocation Questionnaire to learn more
about your investing style.
If you'd like to chat
about your current investments to see if you are invested appropriately for your
risk tolerance, while optimizing returns for your goals, let's talk.
RELATED POST: Understanding Investing
Risk and Your
Risk Tolerance How To Invest When You Know Nothing
About Investing
When measures of both are hard - negative, as they are now, investors should think carefully
about their own
risk -
tolerance and their ability to sustain losses without abandoning their discipline, making sure to align their investments with the actual horizon over which they will need to spend the funds.
Remember to always invest according to your need for return and
tolerance for
risk, regardless of what someone else says
about a stock.
There are a number of factors to consider when thinking
about your own investing
risk tolerance.
The frequency of early exits here may say more
about the industries in which we participate and the kinds technologies we develop, rather than the
risk tolerance of our entrepreneurs.
Once you've identified your
risk tolerance, investment goals and time horizon, you can set
about deciding what types of assets will work best in your portfolio.
However, although this concept seems straightforward at first sight, using it successfully is reliant on on your understanding
about features such as trading asset, trading style,
risk tolerance, and market conditions.
It's all
about your personal
risk tolerance.
Klinman's finding adds to growing concerns
about the
risk of inducing
tolerance by giving vaccines to newborns, who have immature immune systems.